Breach Of Warranty

Louis Dreyfus Trading Ltd v Reliance Trading Ltd [2004] 2 Lloyds Rep 243

This case was heard on 4 December 2004 and judgment was given by Mr Justice Andrew Smith on 12 January 2004. It was heard in the Commercial Court which is a specialist court forming part of the Queen's Bench Division of the High Court dealing with complex cases of a commercial nature. It was an appeal by the Claimant sellers Louis Dreyfus Ltd from an arbitration award dated 25 March 2003 by the panel of arbitrators of the Refined Sugar Association. The arbitration decision had been in favour of the Defendant buyers reliance Trading Ltd. Leave to appeal had been granted by Mr Justice Colman. The arbitrators had held, inter alia, that the measure of damages for the breach by the claimant of the implied warranty of quiet possession was the difference between the value of the sugar when it became available to the Defendant and the contract price. Both parties were represented by junior Counsel.

The Facts

The facts appear in the first part of the judgment of Andrew Smith J. The dispute arose under a contract made on 10 August 2001 by which Louis Dreyfus Trading Ltd (LD) sold to Reliance Trading Ltd (Reliance) some 7000 m.t. of white crystal sugar of Brazilian origin. The sale was made on a C&FFO Banjul basis at a price of US $257.43 per m.t. At the time the contract was made, the sugar was on board and already being discharged from a vessel, the m.v. Dawn which was berthed at Banjul, the capital of the Gambia. However, on 20 June 2001, an associated company of Reliance had agreed to sell white crystal sugar to Boule & Co Ltd (Boule) in Banjul. The vessel which had been carrying that sugar was delayed. Reliance learned in early August 2001 that LD had available a parcel of 7000 m.t. of sugar similar to that which Reliance had agreed to sell to Boule. Although reliance only needed 5000 m.t. to fulfill its contract with Boule, LD was only prepared to sell them the whole parcel . However, Boule agreed to purchase 700...

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